diff --git a/hgext3rd/pushvars.py b/hgext3rd/pushvars.py
--- a/hgext3rd/pushvars.py
+++ b/hgext3rd/pushvars.py
@@ -1,76 +1,17 @@
-# pushvars.py - enable pushing environment variables to the server
+# pushvars.py -- extension for setting environment variables on the server-side
+#                during pushes.
 #
-# Copyright 2015 Facebook, Inc.
+# Copyright 2017 Facebook, Inc.
 #
 # This software may be used and distributed according to the terms of the
 # GNU General Public License version 2 or any later version.
-#
-# When we want to modify how a hook works or to disable it, we
-# can send environment variables that the hooks can read. The
-# environment variables are prepended with HG_USERVAR_ and are thus
-# not a security vulnerability. For example:
-#
-# hg push --pushvars="BYPASS_REVIEWERS=true" --pushvars="DEBUG=1"
-#
-# will result in both HG_USERVAR_BYPASS_REVIEWERS and HG_USERVAR_DEBUG
-# available to the hook environment.
 
-from mercurial import bundle2, exchange, extensions, registrar
-from mercurial import error, commands
-from mercurial.i18n import _
-
-cmdtable = {}
-command = registrar.command(cmdtable)
-
-@exchange.b2partsgenerator('pushvars')
-def _getbundlesendvars(pushop, bundler):
-    '''send shellvars via bundle2'''
-    if getattr(pushop.repo, '_shellvars', ()):
-        part = bundler.newpart('pushvars')
-        for entry in pushop.repo._shellvars:
-            try:
-                key, value = entry.split('=', 1)
-            except Exception:
-                raise error.Abort(
-                    _('passed in variable needs to be of form var= or var=val. '
-                      'Instead, this was given "%s"') % entry)
-            part.addparam(key, value, mandatory=False)
-
-# Ugly hack suggested by pyd to ensure pushvars part comes before
-# hook part. Pyd has a fix for this in in he works.
-exchange.b2partsgenorder.insert(0, exchange.b2partsgenorder.pop())
-
-# Eventually, this will be used when we update to an  Hg that supports this.
-#@exchange.b2partsgenerator('pushvars', idx=0)
-
-@bundle2.parthandler('pushvars')
-def bundle2getvars(op, part):
-    '''unbundle a bundle2 containing shellvars on the server'''
-    hookargs = {}
-    for key, value in part.advisoryparams:
-        key = key.upper()
-        # We want pushed variables to have USERVAR_ prepended so we know
-        # they came from the pushvar extension.
-        key = "USERVAR_" + key
-        hookargs[key] = value
-    op.addhookargs(hookargs)
-
-def push(orig, ui, repo, *args, **opts):
-    repo._shellvars = opts['pushvars']
-    try:
-        return orig(ui, repo, *args, **opts)
-    finally:
-        del repo._shellvars
-
-def uisetup(ui):
-    # remotenames circumvents the default push implementation entirely, so make
-    # sure we load after it so that we wrap it.
-    order = list(extensions._order)
-    order.remove('pushvars')
-    order.append('pushvars')
-    extensions._order = order
-
-def extsetup(ui):
-    entry = extensions.wrapcommand(commands.table, 'push', push)
-    entry[1].append(('', 'pushvars', [],
-                    "variables that can be sent to the server"))
+def reposetup(ui, repo):
+    """
+    The main pushvars functionality moved into core hg. However, the behavior
+    of the core version differs from this extension, which originally would
+    set the environment variables on the server by default when the extension
+    was enabled. To keep that behavior, this extension now just sets the option.
+    This makes the transition painless.
+    """
+    repo.ui.setconfig('push', 'pushvars.server', True)
diff --git a/tests/test-pushvars.t b/tests/test-pushvars.t
--- a/tests/test-pushvars.t
+++ b/tests/test-pushvars.t
@@ -57,5 +57,5 @@
   $ hg push --pushvars "DEBUG"
   pushing to $TESTTMP/repo (glob)
   searching for changes
-  abort: passed in variable needs to be of form var= or var=val. Instead, this was given "DEBUG"
+  abort: unable to parse variable 'DEBUG', should follow 'KEY=VALUE' or 'KEY=' format
   [255]